[The intent of this post is to step back and consider the industry-wide implications of $8.99 bestsellers. I’m making multiple assumptions where I do not have all the info, so I invite corrections, counter arguments and real numbers before anyone jumps off any cliffs.]
The shoe is on the other foot this morning, with indie booksellers contemplating deserting publishers for cheaper $8.99 books at the mass merchants. Amazon.com, Walmart.com and Target.com are waging a price war over the top dozen-or-so projected bestsellers of the holiday season. To do so they are all willing to make a loss of $5-$6 on each book – which is staggering, because last time I checked market share wasn’t legal tender. Naturally, indie bookstore buyers have concluded that if you can purchase books you know your customers will want, at a lower price than directly from the publisher, and force a competitor to take a loss on each copy, why the hell wouldn’t you?
This is my attempt to make a case not to desert the publishers. [Full disclosure: I work for a small publisher and part-time for an indie bookseller, hence the need to look at the situation from both sides.]
The reason to support publishers by buying directly is because of all the services they deliver which indie bookstores value: selection, curation, marketing, creating demand? (You know, many of the same things we tell customers they’re supporting when they shop indie…) The irony of this situation is not lost on anyone.
The question is, who loses if indie bookstores cancel and reorder at 8.99 from the gamblers who are prepared to take a loss of almost $5-$6 on each copy? Publishers theoretically ship the same number of books, just through different channels. Those publishers are making the same profit whether they ship through Wal-Mart or directly, as giving one channel a larger discount than another would be illegal, right? [Please correct me if I’m wrong, but I was under the impression that the ABA took publishers to court over this exact issue several years ago.]
Our sales reps lose out, esp. if their income is commission based. Many stores depend on good reps to cut through the clutter of titles the large houses publish and showcase the books that will appeal the most to customers in our individual regions and cities. However, so many reps have been let go and the remaining rep’s territories have become so large that many small bookstores don’t see reps often, if at all, so I don’t expect the argument that deserting publishers will hurt your sales reps to hold much water with those stores.
Distributors lose out; leaving them with a large amount of money tied up in product that will move much more slowly than anticipated. This tied-up money could have gone to support smaller, more indie-friendly titles that don’t have to be discounted to sell – the bread ‘n’ butter of indie bookstores. We’re going into the busiest time of the year, the time when distributors are the only way to get hot books in time for the holidays. The last thing indie stores need is for those distributors to be unable to stock up on the mid-list and regional hits that are too small to be on the mass merchant’s radar, but which indie booksellers have carefully cultivated a demand for in their cities.
Distributors provide a valuable service to indies: centralizing the supply of small- and mid-size-press books and saving indies the expenses of time and money to place multiple small orders, often incurring individual shipping costs, and making the returning of any unsold books so much more cost-effective. $8.99 books threaten distributors immediately, and with them would go the ability of many indies to cost-effectively source the small, quirky, off-beat titles that we boast about providing to the reading public.
The $8.99 price tag may just be on a handful of the projected bestselling titles of the year, but the economics of publishing seem to suggest that the results of removing this much value from the industry could negatively affect the industry at all levels.
On the other hand, perhaps there’s an argument to be made that the extra margin indies sourcing their bestsellers from walmart.com would receive will revitalize their stores, or that the money readers save buying their books for $8.99 will spur additional book purchases, growing the industry? I can’t fit the pieces together to make either sound convincing, but I hope others can.
The crazy thing is, after writing all that, I can’t say that on balance it would be a bad idea to cancel your publisher order and get the books $6 cheaper at Target.com or not. Margins are so low on books that those extra dollars on the top titles could keep some stores in business. It’s difficult to take the long view when you’re worried about meeting payroll each month.
Bob Miller at Harper Studio has a great post on the economics of a price war and considering the long-term industry impact of $10.00 books becoming the new norm.